Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Vzglyad business newspaper on the US proposals to set a "price ceiling" for Russian oil at $60 per barrel.
On the other hand, agreeing in principle to the price ceiling, regardless of the price, is dangerous. And this is dangerous not only for Russia, but also for other oil producers.
“The proposed oil price ceiling is significantly higher than the cost of oil production in Russia, which varies from seven to $20 depending on the field. And it even almost approaches the price at which we actually sell oil on the world market now. With a discount of $20 and an oil price of $90, we sell oil at $70 per barrel,” Alexey Gromov says.
The main buyers of our oil in Asia are China and India. Since the spring, the latter has actively increased the purchase of Russian black gold at a discount.
“The size of the price cap is not as important as the price cap itself. If we agree to it, then this, in principle, means the end of the world oil market in terms of market pricing. If this precedent is recognized as successful, it creates a danger that the US and the EU will want to use this tool in the future not only against Russia, but also against, for example, Saudi Arabia or other countries. Therefore, Russia's position is of a fundamental nature - it opposes non-market regulation of oil prices,” the expert explains.
“China has made its position a long time ago, and it categorically rejects any price caps. And India has taken a more cautious stance. At the last meeting with representatives of the American top leadership, India offered to wait for concrete figures on the price ceiling. Therefore, we have to wait for the decision of the Indian authorities,” Gromov says.
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